Hello, and welcome to today's webcast with KB Components. Where CEO Magnus Andersson and CFO Michael Grindborn will present the report for the first quarter of 2026. After the presentation, there will be a Q&A, so if you're calling in and want to ask a question, please press star 9 to raise your hand and then star 6 to unmute yourself when handed the word. You can also send in questions via the form to the right. With that said, I hand over the word to you guys.
Thank you very much. Hello, this is Magnus Andersson here from KB Components, and welcome to this report of our Q1 results 2026. With me here is Michael Grindborn as well, our CFO, who will take some of the financial slides coming here later. Today's agenda, we will start by introducing the KB Components group. We will of course give an update on Q1 and what we see in the different markets around the world. We will highlight the financials for the quarter in the 3 regions, North America, Europe and Asia, and then conclude with the financial position and some concluding remarks about the quarter and the coming quarters. Introducing our group, we are a global supplier of high-tech and sustainable polymer components.
A company founded in 1947 in Örkelljunga, Sweden, and we have since developed into a global player with operations in 12 countries around the world. The last country we entered was Poland here in May of this year. Actually, we closed the deal on acquiring Rabugino in Poland outside of Warsaw. Our vision is to be a world leader in technically advanced and sustainable polymer products. Our goals for the company are growth, profitability, and employee engagement, and within these 3 areas, we work actively to be one of the best plastics companies in the world. Our main customer segments are in automotive, electronics and general industries, where we offer technologically advanced and innovative solutions to our customers in these market segments.
We, with our global footprint and our production facilities spread around the world, we can quickly and efficiently deliver products to our customers no matter where they are and offer them the benefit of working in multiple markets with us, adding value to both our customers and KB Components. A map highlighting our presence globally. As mentioned, we got an establishment in Poland here in May, which is not yet on the map. You can also see here our three strategic cornerstones being technological leadership, operational excellence, and global presence, and also again highlighting our strategic goals of having a profitability on EBIT level above 10%, generating growth, both organic and via acquisitions of more than 10% per year, and also having job satisfaction and engagement within our organization exceeding 75%.
Looking at quarter 1, we can say that we had a somewhat expected development for the group in this quarter. A fairly soft quarter, where we have focused on the transformation happening in our North America business and also the continued integration and capturing of synergies with the recent acquisitions that have been done in Europe, especially. 2026, we begin with a weaker sales quarter. Total sales lower than the same quarter previous year. Again, this is driven by the transition in North America, where we're moving from project sales with a lot of tooling sales to the launch of new component sales for new business.
If we look at Europe, our work continues to realize synergies with the acquired units of late and in Asia, also here, partly due to acquisition in India, our focus is on growth, automation and expansion, which we can also see is creating good numbers in that region. We should also mention that during the later part of Q1, we have started to see some effects of the war in the Middle East. Some disruption in the supply chain related to the Strait of Hormuz and rising oil prices. The effects we see are especially on pricing. Raw material prices are increasing in April and onwards, and we are actively working on this together with our customers to manage these raw material increases.
Of course, also making sure we secure raw material to be able to produce and not have disturbances in the supply chain. In total, we report global sales of SEK 670 million. This is below the same period last year, as mentioned. Acquired growth was 4%, currency effect was -3%, and organic growth adjusted for currency was -14% for the quarter. Again, this decline in sales mainly comes from our North American business and is the result of lower to-tool sales and then a series production of components for new business that has not yet ramped up, but is in the process of ramping up.
Integration of our entities in Europe, we can also mention that the three sites that were acquired in Germany in October 2025, we have, during the month of April, communicated and initiated the work of moving production from one of our production units in Saerbeck in Germany to our units in Slovakia and Lithuania. With this, we will have improved utilization of our plants. We will improve our cost efficiency and this will provide improvements in the operating result for our European operations. We are very happy to mention again that we completed the acquisition of Rabugino in Poland. This was done on May 7th, adding multiple opportunities to our group.
We have a nice site now outside of Warsaw, owned by us and adding about SEK 200 million in turnover, and also a very interesting pipeline of new business that is being brought into production at the site in Poland. Looking at the three regions that we talk about, North America, in this quarter, as it was in Q4 2025, is affected by this transition that we're seeing, especially in the Canadian business. We are having lower tooling sales than previous year. The effect of this was SEK 42 million negative in Q1 2026 versus Q1 2025.
That is due to the transition that was mentioned before from winning projects, delivering tooling for projects, and now stepping into a running production of components especially for the Rivian R2 model that is launched here in April in the North American market and is currently under ramp-up. We have also seen in the quarter a bit of delay on another project-based business that we have in our US entity in Dallas. This is partly caused by the raw material price increases that is an effect of the rising oil prices. In part of this project business, raw materials has become a big component and causing some delays in the projects that are anticipated to happen during this year. Business in Europe is stable in the quarter.
Although growth doesn't meet our expectations for the period, profitability and revenue are in line with last year. We are working on integrating the acquired operations in Germany, as I said, and also capturing synergies within that business. We are taking initiatives with these entities both regarding pricing and also consolidation and coordination of production to get benefits with the rest of the KB group in Europe. Moving to Asia, we can see that our India operation, which was acquired in January of 2025, continues to develop very well. We are seeing growth both in sales and in improved profitability, and that is coming from higher volumes, better cost efficiency through measures initiated, and also reduction of staffing levels through increased automation and process improvement.
This is a market with good demand, and we are able to capture that demand, and we also see good opportunities for continued growth in this market. KB Components in China is also running well, delivering good results in the quarter, remaining at a good profitability level, and also growing the business with some key customers for that unit in Wuxi, China.
Giving you an update of the quarterly result, the net sales, as Magnus mentioned, amounted to SEK 670 million compared to SEK 766 last year. Acquired group was 4%, currency effect was -3%, and our organic group was -14%. Project sales for tooling decreased by SEK 49 million compared to last year in the quarter. Adjusted EBITDA amounted to SEK 92 million compared to SEK 113 million last year, corresponding to an adjusted EBITDA margin of 13.7% compared to 14.7% last year. Adjusted operating result, EBIT, amounted to SEK 45 million compared to SEK 65 last year, corresponding to an adjusted operating margin, EBIT margin of 6.7% compared to 8.5% last year.
Our adjusted earnings per share amounted to SEK 0.47 compared to 0.81 last year, and earnings per share amounted to SEK 0.40 compared to 0.80 last year. Operating cash flow from operating activities was in line with last year, amounted to SEK 5 million this year, SEK 4 million last year. Going over to our three regions and starting with North America, net sales here amounted to SEK 272 million, down from SEK 362 million last year. It's corresponding to 41% of our total net sales. The currency effect was -4%. Our organic growth was -21%. Here, tooling sales, the project sales in tooling decreased by SEK 42 million compared to last year. It was quite a big part of a decrease in sales.
Adjusted EBITDA amounted to SEK 28 million compared to SEK 48 million last year, corresponding to an adjusted EBITDA margin of 10.2%. Our adjusted operating result amounted to SEK 9 million compared to SEK 30 million last year, corresponding to an adjusted operating margin of 3.2%, down from 8.4% last year. Our European operations here, net sales was in line with last year, SEK 355 million compared to SEK 360 million last year. It was 52% of our total net sales. Acquired growth was 9%. The currency effect was minus 1% and organic growth minus 9%. Currency minus 1% and organic minus 9%. Adjusted EBITDA amounted to SEK 53 million, the same as the year before.
An adjusted EBITDA margin of 14.8%, slight improvement from 14.7% last year. Our adjusted operating result amounted to SEK 31 million compared to SEK 30 million last year, a slight improvement in the adjusted operating margin, 8.8% compared to 8.4% the year before. Our Asian business here, net sales was the same as the year before, SEK 44 million, and it's corresponding to 7% of our total net sales. Currency effect was -11%, the organic growth was 11%. Adjusted EBITDA, SEK 12 million, just as the year before, with an adjusted EBITDA margin of 26.3%. Our operating result also the same as the year before, SEK 5 million, an adjusted operating margin, slight improvement from 11% up to 11.5% this year.
Have a look at our financial position. The group's total assets amounted to SEK 2.4 billion, up from SEK 2.2 billion last year. The increase come from both, we have more cash and, at the same time, more long-term debt deeds because we have this change of banks that is ongoing. We are paying off old loans and taking up new loans. It's just in the mix between March and April this is happening, so that's why we have some excessive cash this month. Also, we see an increase in both trade receivables, inventory and trade payables. It's because of, yeah, more business ongoing right now in March compared to December last year.
The inventories increase is partly due to this Middle East crisis, but we are buying some extra material in advance to not have lack of material in the future. Our equity amounted to SEK 600 million, more or less the same as the same quarter last year. The equity to asset ratio, 24.6%. Our net debt, excluding leasing debt, amounted to SEK 651 million. Interest bearing net debt, excluding leasing liabilities in relation to adjusted EBITDA, also excluding leasing amortization, amounted to 2.4 compared to 1.3 the year before. We have a 3-year credit facility agreement with DNB for SEK 1 billion, with an extension option for additional 2 years.
Thank you, Michael. Concluding remarks, yes, as we have mentioned, a softer Q1 with expectations for improvements in North America coming quarters. The market outlook for the coming quarter is that demand is fundamentally stable in all segments. Of course, some uncertainty regarding the raw material availability and especially raw material prices related to the Middle East conflict. We are focusing heavily on this, I would say so far successfully in working to ensure we both have access to raw materials as well as to pass on cost increases into our market. So far, we have not seen much direct impact on customer demand due to this generally higher price level. Of course, this could become a consequence if price levels related to oil prices continue to rise.
We should also mention that we continue to review our structure and making structural improvements and production consolidation where it adds value. We have talked in this presentation today about the activities ongoing in Germany, moving into Slovakia and Lithuania. Also, as communicated earlier, been moving production from example given Canada into Mexico if they are labor-intensive and we can use better cost locations to produce these products. Also, again, our group continues to develop with new acquisitions, the latest being Rabugino SP in Poland, which provides us further opportunities to optimize our production structure and expand with new customers.
also, concluding, again, that what we are seeing in North America now is an expected phase due to the transition from, project wins and project sales, into, production ramp up. We are expecting this to improve during the later part of Q2 as volumes ramp up for the Rivian R2 business especially. Thank you for your attention.
Thank you so much for the presentation here. We will now open up for some Q&A. If you're calling and want to ask a question, please press star nine to raise your hand and then star six to unmute yourself when handed the word. We can start off with a question here. The first caller here is Hampus Engellau now from Handelsbanken. You have the word.
Can you hear me?
Yes, we can.
Excellent. Yeah. I had a couple of questions. Firstly, on the European business, if you could maybe add some more flavor on the drop in organic growth to understand where you've seen, you know, your weakness on the organic sales. Then is the question on the raw material side with the increase in raw prices. Do you expect any lag between the re-implemented price increases and the cost increase? Or are you getting that directly towards your customers? Then lastly, it would be interesting to hear a bit on the integration of the German acquisition and when do you think, and it's an ongoing process, but on that acquisition, when do you think you will be kind of on par with the European operations in terms of profitability? Thank you.
Yes. Thank you, Hampus Engellau. Looking at Europe and the organic growth, we see some lower sales in a couple of our entities compared to the same period last year, causing the lower organic sales. We are seeing, for instance, in Estonia is one entity where we have lower sales compared to last year. That is part of the Plastone acquisition that was done in December of 2024. Like overall that is developing well, but in this quarter, we're seeing lower volumes especially.
it's the main decrease, when it comes to volume in Europe?
Yeah. Your second question, Hampus Engellau, around pricing. We are our ambition is to not have a lag between pricing or cost increases coming in and price increases going out. We are trying to manage this situation and this balance in a proactive way. We are not expecting any major negative on our gross margins due to the price increases that we're seeing so far at least. The German acquisition and the, you know, synergies we are seeing there.
What we are doing now with consolidating production means that, you know, this is a project that will carry on for the rest of this year and at the start of next year or at the late, very late part of this year, we should see this business, if we say it like that, reaching profitability levels that is on par with the rest of KB in Europe, as the business or the production transfers into Slovakia and Lithuania especially.
All right. Thank you.
Thank you.
The first question here is regarding the lag, yeah. Hello, what do you consider a relevant time lag for price hikes to be passed through to customers, 3-6 months?
As I just answered on the previous question, we are, our ambition is to not have a price lag at all. I would say it is more in the range of 0-3 months, than 3-6 months. This is a negotiation between us and customers and us and suppliers that is ongoing and we're spending a lot of focus and time on that right now. It should be in the range of 0-3 months.
Thank you. Do you expect to pass through 100% of the raw material price increase?
That is our ambition. Yes. If we will succeed fully in that remains to be seen. We consider this a, you know, a unique and out of the ordinary situation, what is happening with the raw material prices right now. We are seeing overall good understanding of that in our customer base as well. Our ambition is to forward 100% of the increases.
Thank you. Given your expanded financing setup, do you think it's more likely that you can acquire two to three companies per annum versus your historical guidance of one to two?
Yeah, we see that that's fully possible. We have internally said 1-3, but yeah, it should be possible to add on 2-3 per year.
Thank you.
We got a lot to look at all the time, sir, but, of course, we see what is really interesting for us. 2 to 3 should be possible.
Thank you. What can you tell us about the current margins level in Plastone, Ernst Plastics, Rabugino, as well as the old KB Europe?
Nah. Normally, we don't go into that detail, of course, but we have seen that the old Plastone is developing well, in general, and partly quite close to the norm, to the other companies within Europe. Rabugino, that is entering now in our group, has a lower profitability level currently than our other European business. Also the German business has, of course, lower profitability when they entered. They are coming from more or less 0 result or even small negative results last year.
Thank you. Moving on to the final question here. In the light of today results, how should we view your midterm margin target of 10% EBIT margin?
We are working on a transition in North America, as we have said, and also the integration of new businesses that have entered the company in the group in Europe, especially, where we have a need to work up the profitability levels to some degree. As we talked about in the last quarterly report, That will take some time to work it up to the 10% level. That as an ambition for 2027, especially. We are not anticipating to reach that level fully here in 2026.
Thank you. Those are all the questions we had for today. Thank you all for tuning in and sending us questions. Thank you to KB Components for presenting here today.
Thank you.
Thank you.